Legal Marijuana Nightmare: How Business Greed Could Ruin a Golden Election Opportunity
Ohio may about to legalize marijuana, but not the way other states have done it. A constitutional amendment that would go before voters in November would create a virtual monopoly on commercial marijuana grows for the entire state. That's not sitting well with a number of Ohioans, including the Republican state legislature and a good number of Buckeye State legalization and medical marijuana activists. It's also leaving major national drug reform organizations deeply ambivalent.
The ResponsibleOhio initiative is almost certain to qualify for the ballot any day now. Its well-financed campaign has handed in more than 700,000 signatures to state officials, nearly twice the 305,000 valid voter signatures needed. Those officials have up to two more weeks to verify the signatures.
The initiative allows adults 21 and over to grow and possess limited amounts of marijuana and calls for a system of regulated and taxed marijuana production and sales. It even has provisions for medical marijuana. None of that is controversial.
But under ResponsibleOhio's initiative, commercial marijuana production can only take place at 10 sites in the state. The sites have already been allocated to 10 sets of investors, who have kicked in $1.7 million for the campaign so far and are prepared to spend $20 million or more convincing the public to vote for it.
The investors include a number of Ohio business interests—real estate developers, venture capital firms, philanthropists, with nary a Cheech or a Chong among them—as well as some home state big names who could sway public opinion. These include NBA legend Oscar "Big O" Robertson, Cincinnati-based fashion designer Nanette Lepore, and former Cincinnati Bengals and Cleveland Browns defensive end Frostee Rucker (now with the Arizona Cardinals).
In return for their hoped-for voter-granted monopoly, the investor groups would pay a $100,000 fee and a 15% tax on their gross revenues, as well as other commercial fees. Critics have charged that the plan freezes out all but the initial investor groups, but ResponsibleOhio counters that there will be plenty of commercial opportunities in making and selling marijuana products.
While this written-in monopoly may seem strange to many, it's not going to seem so strange to Ohio voters. In 2009, they legalized gambling by approving a constitutional amendment that specified sites for four casinos owned by the companies backing the amendment.
ResponsibleOhio looks to have deep enough pockets to put on a full-scale, multi-million-dollar advertising campaign. Estimates are that to win in California next year, legalizers will have to spend $10 million or so in advertising, but ResponsibleOhio is talking about spending $20 million in a much smaller media market, and it doesn't have to go begging for donors.
The momentum is there. The entire country is riding a wave of increasing support for marijuana legalization, and Ohio is no exception. An April Quinnipiac University poll last month had support at 53% (it also had narrow majorities for legalization in swing states Florida and Pennsylvania), up two points from the same poll a year earlier.
But ResponsibleOhio is facing a head-on challenge from the legislature, attacks from legalizers left out in the cold, and a more general discomfort with constitutionally-mandated monopolies.
Late last month, the legislature approved a proposed constitutional amendment that would bar any addition to the state constitution that created "a monopoly, oligopoly, or cartel" to distribute a federally controlled substance. The proposed amendment specifies that if it passes, any initiative that conflicted with it—i.e. the ResponsibleOhio initiative—"shall not take effect."
If both initiatives passed, rest assured that lengthy legal battles would ensue, but in the meantime, marijuana legalization in Ohio would be dead in the water. While legislative leaders paid lip service to concerns about anti-competitiveness, the amendment is clearly designed to stop legalization and is the instrument of a body that has steadfastly refused to consider legalization for nearly 20 years.
That didn't stop some legalization supporters—and ResponsibleOhio foes—from applauding the move, and even encouraging it.
"We don't support the ResponsibleOhio initiative because we don't believe it achieves the goals of legalization, said Sri Kavuru, president of Ohioans to End Prohibition (OTEP), which is campaigning to get its own legalization initiative on the 2016 ballot. "I testified in favor of the anti-monopoly amendment, and I believe it will pass and get more votes than ResponsibleOhio," he told AlterNet.
"It is very interesting that all these different parties have come together with the same purpose in mind, to stop the hijacking of our constitution by private interests," Weaver said. "It's very strange indeed, but the collaboration of different groups for a mutually beneficial and moral purpose, I think, is a good thing."
"The current system is actually better than their plan. It gives them a monopoly where only these 10 groups get the right to cultivate commercially, and that's bad policy for the state," Kavuru argued. "It creates an environment that allows a black market to thrive, and it doesn't eliminate arrests. The purpose of legalization is supposed to be to get rid of criminal arrests."
The ResponsibleOhio initiative would increase penalties on some cultivators and would leave people under 21 subject to arrest, Kavuru charged. He also attacked its medical marijuana provisions.
"It doesn't actually give any protection for patients and only says a commission 'may' implement a medical program," he said. Everything for recreational is 'shall.'"
Ohio Families CANN is also not satisfied with ResponsibleOhio's initiative, said Nicole Scholten, a spokesperson for the group, which seeks access to marijuana to treat sick children.
"We are wary of ResponsibleOhio's approach," she said. "We are not convinced it would yield the type and volume of medical cannabis that would be effective for our children. Legalization does not equal sustainable medicine. The medicine that would help our kids requires specific strains of cannabis and vast quantities. ResponsibleOhio's plan to have only ten grow sites is problematic. There is no guarantee these businesses would devote the grow space to the kind and volume of cannabis we need."
But another patient-activist organization that has tried unsuccessfully for years to get an initiative on the ballot, the Ohio Rights Group, is less negative. Its executive director, Jack Pardee, noted that the legislature has refused for nearly 20 years to even discuss marijuana legalization bills.
"We've been having a debate in our community about the merits of what the legislature is trying to do with this thing and, in my opinion, it has nothing to do with protecting Ohioans from economic forces," Pardee said. "ResponsibleOhio isn't perfect, but it has a lot of the pieces that ending prohibition needs to be successful."
National Drug Reform Groups Ambivalent
The divisions among Ohio activists are somewhat reflected by the national groups that have so far been the big players in pot legalization. None of them are directly involved with ResponsibleOhio—it certainly doesn't need their fundraising abilities—but they are watching with great interest and concern.
"It doesn't resemble our initiatives," said Marijuana Policy Project spokesperson Mason Tvert. ""We have not proposed such laws in the past, and it's not the type of law we would draft," he told AlterNet.
"It's up to Ohio voters to decide if this is the kind of system they want to replace marijuana prohibition with," said Tvert. "It would get the job done, but we think marijuana should be treated like alcohol, and there should be a system where there can be a lot of competition and different businesses out there producing this product."
And he had a word of advice to Ohio activists opposing ResponsibleOhio.
"If they want to end marijuana prohibition, they need to weigh their opposition to this initiative against the possibility of having to wait longer for a better initiative," Tvert said.
"A lot of legalizers, we feel like the movement has been hijacked by the money people," said Keith Stroup, founder and currently counsel for the National Organization for the Reform of Marijuana Laws. "But the bottom line for NORML is that we want to legalize marijuana," he told AlterNet.
"While we'd have a preference for the little or medium-sized guy, we're not that concerned about who gets rich off it," the movement veteran said. "We're about not treating marijuana users like criminals, and we can speed that process along by three or four or five years because some rich investors run their own initiative, if it actually legalizes pot smoking and dispensaries where they can buy, if they qualify for the ballot, we will support it even if it's not perfect."
Stroup took great umbrage with the legislature move to block the initiative.
"That's a bad faith move by the legislature," he growled. "The reason we have the initiative process is because legislatures were not responsive to the will of the people, and now we have a case where the people are going around the legislature, and the legislature is going to try to go around the people."
Stroup prophesied high-stakes litigation if ResponsibleOhio wins at the ballot box, but its victory is nullified by passage of the legislature's initiative.
"That undermines the basic purpose of initiatives, and we have at least one legal opinion that nothing in that resolution would in any way affect the initiative if it were to pass," he said. "I hope the courts act in that case."
"We've fought for a long time to end marijuana prohibition for civil rights, social justice, public health, and public safety reasons, and to create a legal market," said Ethan Nadelmann, executive director of the Drug Policy Alliance, "But to then have some folks come along trying to create a constitutionally-mandated oligopoly kind of sticks in everybody's craw."
DPA has worked and is working on pot legalization in a number of states, and was consulted in the drafting of the ResponsibleOhio initiative, but is not endorsing it. Nadelmann's ambivalence was indicative of the mixed feelings the measure is arousing among activists.
"The fact is, we have investors putting up $20 or $30 million to win this thing in a state that will be the center of national political attention next year—no one else is going to do it in Ohio. There is a possibility the oligopoly provision could get knocked out. The best outcome would be for this initiative to win, and then get that knocked out," he said.
"Aside from the oligopoly provision, it's actually pretty good," Nadelmann continued. And after criticism of an earlier draft, "they were actually pretty soliticous, they added home grow, medical marijuana protections, and the distribution model is pretty good."
Who Will Be in the Driver's Seat?
But the ResponsibleOhio move also signals the emergence of monied interests whose deep pockets could leave activists and the drug reform movement on the sidelines—and who may not share the same interests dear to the hearts of reformers.
"There's something similar going on in Michigan," Nadelmann noted, referring to an as-yet-to-filed initiative from the Michigan Responsibility Council, one of three groups planning legalization initiatives in the state right now. "And look at Arizona, there's a lot of industry funding there, and there's been hard negotiations between MPP and those guys."
"The influence of DPA, MPP, and other activists is going to diminish rapidly," he predicted. "This is going to be increasingly driven by industry, and a lot of competing interests within the industry. And as this evolves into legislative processes, other forces are going to come into play and certain players will be able to make their demands felt. Social justice concerns could get knocked out."
If Not ResponsibleOhio, Who, and When?
The unhappy Ohio legalization activists and other ResponsibleOhio critics say that if and when it is defeated, they can move forward with their own legalization plans. Given the legislature's recalcitrance, that means they would have to run their own initiative campaign.
They haven't been able to do that so far, and while some, such as OTEP's Kavuru, say they can do it now, others aren't so sure.
"We have access to a lot of money," Kavuru said. "And we have a real solid political team. We're in negotiations right now we significant funding, and it's much easier to raise money for a recreational initiative than a medical one, because people are also looking at it as an investment."
But ResponsibleOhio is here and now, and if it goes down, it remains to be seen if anyone else can actually get on the ballot.
"If this is defeated this year, I doubt any major funders would step in to play a role in 2016," said NORML's Stroup. "I understand. The people in Ohio feel they were doing a great grass roots effort and hear these rich guys came along and bought the space. But the Ohio activists so far haven't shown they can get the funding to do good surveys, let alone pay for signatures or a professional campaign. This year may be our chance to take a conservative state like Ohio and leapfrog it ahead on legalization. I'm not real comfortable with ResponsibleOhio, but I just want it legalized."
The fun is just beginning in Ohio.